Question
Please help with one or all of the following 5 questions: Builtrite had sales of $700,000 and COGS of $280,000.In addition, operating expenses were calculated
Please help with one or all of the following 5 questions:
Builtrite had sales of $700,000 and COGS of $280,000.In addition, operating expenses were calculated at 25% of sales.Builtrite also received dividends of $50,000 and paid out common stock dividends of $25,000 to its stockholders.A long-term capital gain of $70,000 was realized during the year along with a capital loss of $50,000
Based on the above information, answer the following questions:
1.If we add to our problem that Builtrite also had $10,000 in interest expense, how much would this interest expense cost Builtriteafter taxes?
$17,000
$12,200
$6,100
$3,900
2.IfBuiltritehad experienced a long-term capital loss of $30,000 (instead of the $50,000 long-term capital loss stated in the problem), and still had the $70,000 long-term capital gain stated in the problem, which of the following is correct (compared to the original answer):
taxable income would increase by an additional $40,000
taxable income would increase by an additional $20,000
taxable income would increase by an additional $25,000
taxable income would not change
3.(This problem is not related to the above problem) Last yearBuiltritehad retained earnings of $140,000.This year,Builtritehadtruenet profits after taxesof $65,000 which includes common stock dividends received of $10,000,and also paid a preferred dividend of $35,000.What isBuiltrite'snew level of retained earnings?
$180,000
$190,000
$200,000
$170,000
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